Samsung Market Value Falls by $6.5 Billion After Outlook

Samsung Electronics Co.'s second-quarter forecast slashed $6.5 billion off its market capitalization Friday as worried investors sent the company’s stock down as much as 3.9%.

Reuters

Concerns sales of Samsung’s Galaxy S4 smartphone may fall short of estimates also rubbed off on shares of the company’s Korean rival LG Electronics Inc., which fell 1.1%.

Samsung said it expects second-quarter operating profit between 9.3 trillion won and 9.7 trillion won (US$8.2 billion-US$8.5 billion), which would be a record for the company.But analysts quickly homed in on the forecast falling below the market consensus of 10 trillion won.

Mr. Lee estimates Samsung shipped 74.5 million smartphones in the second quarter. That would represent a 48% increase in shipments compared with the year-earlier 50.2 million units, based on data from researcher IDC. ButSamsung’s first-quarter shipments grew at a faster clip — 61% to 70.7 million units, according to IDC data.

Analysts say heavy marketing costs likely ate into Samsung’s earnings as it began selling the Galaxy S4 in April. The world’s largest smartphone maker by shipments faces more brokerage downgrades as concerns about sales remain, they add.